Bitcoin, which hit a record high of $126,200 at the beginning of the week, has retraced to $121,600 following recent corrections. Despite the downturn, several analyses suggest a bullish scenario that could see Bitcoin reaching $140,000 within the month. Economist Timothy Peterson pointed out that based on simulations over the past decade, there’s a 50% chance the price will close above $140,000 by month-end and a 43% probability of closing below $136,000.
Factors Supporting the $140,000 Bitcoin Thesis
Since their market debut in January 2024, Spot Bitcoin ETFs have witnessed over $60 billion in net inflows. Last week alone, these ETFs attracted an inflow of $3.2 billion, nearing record highs.
Additionally, the BTC balance on centralized crypto exchanges is at a six-year low, dropping to 2.83 million units. In the past month alone, 170,000 BTC were withdrawn from exchanges. This dwindling supply, combined with corporate acquisitions, supports Bitcoin’s upward trend even after a record-triggered retracement. The “Uptober” narrative for October supports the technical outlook, while low short position accumulation keeps corrections shallow.
Investor appetite in the stock market also bolsters Bitcoin. Augustine Fan from SignalPlus remarked on the limited likelihood of a 10% rise in the S&P 500 by year-end, indicating that investors are cautiously taking risks. When riskier assets find coordinated support, Bitcoin is known to benefit positively from liquidity cycles.
Risks Are Present
Nick Ruck from LVRG Research noted that the strong technical foundation is balanced by macro uncertainties. While institutional demand and accumulation trends can facilitate new peaks, surprises in the Fed’s monetary policy could significantly affect pricing. The U.S. government shutdown hinders the release of new macroeconomic data, narrowing the decision-making space regarding inflation indicators and potentially delaying rate cut expectations.
At the end of the month, the FOMC’s interest rate decision coincides with the earnings season of “Mag-7” companies, encountering expanded valuations. If the data confirms risk appetite, an acceleration towards $140,000 might be triggered. Otherwise, valuations may seek a healthier bottom. The market’s direction will depend on the pace of ETF inflows and off-exchange supply dynamics alongside these two catalysts.